DuPont Decomposition
Why does CEATLTD earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
13.8% = 4.5% × 1.13 × 2.76
Latest: FY2026
Profitability
Net Margin
4.5%
0.8% →4.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.13x
1.02x →1.13x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.76x
2.80x →2.76x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 11.7 pp over 5 years. Driven by net margin improving (0.8% → 4.5%), asset turnover improving (1.02x → 1.13x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 0.8% | 1.02 | 2.80 | 2.2% |
| FY2023 | ₹0Cr | ₹0Cr | 1.7% | 1.16 | 2.80 | 5.4% |
| FY2024 | ₹0Cr | ₹0Cr | 5.5% | 1.18 | 2.47 | 15.9% |
| FY2025 | ₹0Cr | ₹0Cr | 3.6% | 1.18 | 2.57 | 10.8% |
| FY2026 | ₹0Cr | ₹0Cr | 4.5% | 1.13 | 2.76 | 13.8% |
How to read DuPont
- • Rising ROE from margin = pricing power, operational improvement (good)
- • Rising ROE from turnover = better asset utilization (good)
- • Rising ROE from leverage = more debt, amplified risk (caution)
- • Falling ROE across all three = structural deterioration (red flag)
DuPont decomposition from audited annual financials. Factual analysis, not investment advice.